British sustainable paper and packaging company Mondi has announced its trading update for the third quarter (Q3) of financial year 2023.
For this quarter, which ended on 30 September 2023, the company said that the market demand continued to remain 'soft' due to the current weak macroeconomic environment and challenging market conditions.
The company stated that average selling prices also remained low, mainly mitigated by lower input costs and fixed cost control measures.
Mondi’s quarterly underlying earnings before interest, taxes, depreciation, and amortisation (EBITDA) from continuing operations for the reported quarter decreased to €261m ($275m) from €450m in Q3 of 2022.
The packaging company noted that this lower underlying EBITDA registered during the quarter was mainly due to a 'much-reduced' forestry fair value gain.
In Q1 and Q2 of this year, Mondi’s underlying EBITDA was €351m and €329m, respectively.
Mondi CEO Andrew King said: “Demand has remained subdued in the third quarter with stable pricing in containerboard but continued price declines in kraft paper. We expect this trend to continue through the final quarter of the year along with stabilising input costs and a greater impact from maintenance and project-related shuts.
“However, our low-cost asset base, broad product offering and fully integrated business model provides resilience in this environment and ensures we are well positioned to benefit when market conditions improve.”
In Q3 2023, Mondi highlighted that the order booking under its Corrugated Packaging segment improved and its containerboard prices were also stable.
The company saw price and volume declines in kraft paper, impacting its Flexible Packaging segment.
Mondi’s converting network witnessed a resilient performance, while its Uncoated Fine Paper pricing continued to decrease across Europe amid current weak market demand.
King added: “Our €1.2bn expansionary capital projects pipeline remains on track and within budget. We remain confident in the structural growth of the packaging markets we serve, underpinned by a growing demand for sustainable packaging solutions, and continue to invest in the future growth of Mondi.”
